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> Customers failed to pay back one quarter of the money they borrowed, compared with the 42% default rate originally expected. It was a bonanza for Santander.

> Customers failed to pay back one quarter of the money they borrowed, compared with the 42% default rate originally expected. It was a bonanza for Santander. I was going to say that Wall Street isn't the bogey man here and it's the car dealerships and the many Americans desire to own a flashy car they can't afford that is the problem, but making a product that you expect 42% to default on (with all the misery that that entails) is truly awful.

BillyTheMage 3y ago
An even deeper culprit is city planners, highway departments, the folks who write regulations related to such things. Everything is unwalkable. They've made us need cars, and then use that arbitrary need as an excuse to make even more things be car-centric.
- helsinkiandrew 3y ago
  Agree that that's a problem, but the couple in the articles last car cost them $500, they just wanted something that was a little more reliable, but got sold a year old Ford F-150 truck with a €30,000 loan at 22% interest.
happytiger 3y ago
Jesus Christ that number is astounding. Those are Vegas loan shark numbers not auto loan default numbers.
NovemberWhiskey 3y ago
In all cases, you expected to take some losses when you extend credit - at what point does it become "awful" and not merely "business"?
- helsinkiandrew 3y ago
  A few percent is the normal. The link below says the current 6.1% of car borrowers who are behind on payments is unprecedented. When a payer defaults they usually loose the item that is being financed, although they have paid far more than the value they've got out of it. Selling and expecting a 40% losses means your selling to people you know won't be able to afford the payments - and (in my opinion) should be treated as fraud. https://www.forbes.com/sites/antoniopequenoiv/2023/10/21/americans-are-overdue-with-their-car-payments-at-highest-rate-in-nearly-30-years/ https://www.forbes.com/sites/antoniopequenoiv/2023/10/21/ame...

BillyTheMage 3y ago

An even deeper culprit is city planners, highway departments, the folks who write regulations related to such things. Everything is unwalkable. They've made us need cars, and then use that arbitrary need as an excuse to make even more things be car-centric.

helsinkiandrew 3y ago
Agree that that's a problem, but the couple in the articles last car cost them $500, they just wanted something that was a little more reliable, but got sold a year old Ford F-150 truck with a €30,000 loan at 22% interest.

happytiger 3y ago

Jesus Christ that number is astounding. Those are Vegas loan shark numbers not auto loan default numbers.

NovemberWhiskey 3y ago

In all cases, you expected to take some losses when you extend credit - at what point does it become "awful" and not merely "business"?

helsinkiandrew 3y ago
A few percent is the normal. The link below says the current 6.1% of car borrowers who are behind on payments is unprecedented. When a payer defaults they usually loose the item that is being financed, although they have paid far more than the value they've got out of it. Selling and expecting a 40% losses means your selling to people you know won't be able to afford the payments - and (in my opinion) should be treated as fraud. https://www.forbes.com/sites/antoniopequenoiv/2023/10/21/americans-are-overdue-with-their-car-payments-at-highest-rate-in-nearly-30-years/ https://www.forbes.com/sites/antoniopequenoiv/2023/10/21/ame...